In almost any case where you’re seeking compensation for an injury, you will have to deal with an insurance company of some kind. Whether the claim involves car accidents, suing for medical malpractice, or you are part of the 25% of injury claims that involve slips, trips, and falls every year, you should know how insurance companies determine compensation. Before you get deep into the process, know how typical insurance companies handle personal injury cases.
Personal Injury Protection, or PIP, covers medical expenses and lost wages as an extension of car insurance. The biggest advantage of PIP is its comprehensiveness. In the case of car accidents, insurance companies will pay out claims regardless of who is at fault. This type of insurance is mandatory in some states and optional in others, and what exactly it covers varies state to state. For example, PIP in Utah will cover acupuncture as a medical expense for accident recovery, but California will not. PIP is typically more expensive than traditional insurance, but it pays off in removing the question of blame from car insurance issues.
The job of an insurance adjuster is to investigate the facts of a case and determine how much it is worth. The adjuster does not work for the insured party or the victim, but rather for the insurance company. The primary concerns of insurance adjusters are to keep payouts as low as possible so that the insurance company remains profitable and to avoid a lawsuit. When personal injury cases like car accidents go to court, the judge and jury could decide on a high damage award if they are sympathetic to the victim. An insurance adjuster will try to get the insured party to accept the lowest settlement possible before going to court and without involving lawsuits.
To determine a settlement offer, an insurance adjuster will look at the medical bills and costs that have been incurred and will be in the future, any losses in the form of lost wages or income, emotional distress damage, and pain and suffering damages. While some of these factors come from straightforward financial documentation, insurance companies use various formulas to calculate the last two. When making an offer, an adjuster will usually decide the maximum they are willing to pay out and then make an offer 25% to 50% lower, giving them wiggle room throughout settlement talks.
While everyone needs insurance to protect themselves and their assets, it is easy to get blindsided by the different procedures and policies. Make sure to do your research and consult your personal injury lawyer before diving into insurance discussions.